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L.A. County Landlords Lose Appeal Over City Eviction Moratorium

Aug. 25, 2021, 5:46 PM

A Los Angeles landlord group lost its bid to stop the city from enforcing key provisions of the eviction moratorium it imposed in response to the Covid-19 pandemic, according to a Ninth Circuit ruling on Wednesday.

The Apartment Association of Los Angeles County didn’t show a sufficient likelihood of success on the merits, the U.S. Court of Appeals for the Ninth Circuit said, affirming a lower court decision denying the landlords’ request for a preliminary injunction.

Even if the moratorium significantly interferes with the landlords’ ability to enforce their leases, the city “fairly tied” the moratorium to its interest in not having people displaced in the midst of a pandemic, Judge Daniel Aaron Bress said.

Although eviction moratoriums have been successfully challenged on constitutional grounds—including before the U.S. Supreme Court—the challenges have been based on other arguments.

Here, the question was whether Los Angeles’s eviction moratorium violated the U.S. Constitution’s Contracts Clause, which according to the Ninth Circuit, it doesn’t.

“Whatever force plaintiff’s challenge may have had in a much earlier era of Contract Clause jurisprudence, more contemporary Supreme Court case law has severely limited the Contracts Clause’s potency,” Bress said.

For the first century and a half of U.S. legal history the Contract Clause “imposed consequential limitations that federal courts routinely deployed to invalidate state and local legislation. But since the Supreme Court’s 1934 case, Home Building & Loan Association v. Blaisdell,” the Contract’s Clause “prohibitive force” has been significantly curbed, Bress said.

The modern test asks two questions, first whether a state law has “operated as a substantial impairment of a contractual relationship,” and second, whether the law is drawn in an “‘appropriate’ and ‘reasonable’ way to advance ‘a significant and legitimate public purpose,’” Bress said.

The court didn’t decide whether the challenged provisions amounted to a “substantial impairment of contractual relations,” deciding that even if they did, the steps were reasonable and appropriate, “given the challenges that COVID-19 presents.”

The district court properly deferred to local officials, so even assuming a substantial impairment, the court said the landlords were “unlikely to show that the eviction moratorium is an unreasonable fit for the problems identified,” Bress said.

Apartment Association is represented by Rutan & Tucker LLP. Los Angeles and related defendants are represented by the City Attorney’s Office.

The case is Apartment Ass’n of L.A. Cnty. v. City of L.A., 9th Cir., No. 20-56251, 8/25/21.

To contact the reporter on this story: Holly Barker in Washington at hbarker@bloombergindustry.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Carmen Castro-Pagán at ccastro-pagan@bloomberglaw.com

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